Banking is an essential service. A basic bank account is essential to function properly in present day Australian society. This means that the nature of banking services – the kinds of financial products that are offered and the fees that are charged – has a very broad impact.
Consequently, the welfare of consumers should be protected by law and not, as is currently the case, by the self-regulation of the banking industry.
Last financial year, Australia’s major banks announced massive net profits despite the global financial crisis; the ‘big four’ banks each posted profits between $4.7 billion and $2.6 billion.
At the same time, Fujitsu Consulting estimated that, on average, Australian households pay about $1000 per year on bank fees – roughly 22% more than UK householders and 10% more than the US.
The Australia Institute recently calculated that the average person earning around $50k is likely to be paying $28.85 per week toward bank profits.
The Greens introduced their Banking Amendment (Delivering Essential Financial Services for the Community) Bill 2010 in the last period of sittings. The Bill provides legislative protection for banking customers in a number of basic banking services:
- Minimising or removing fees from basic services;
- Ban $2 ATM fees;
- Introducing a variable rate mortgage product that will only permit genuine changes to the lender’s cost of funds to be passed on to customers;
- Capping the level of mortgage exit fees.
You can read more about the Greens Fairer Banking policy here